Shippers Scramble for Empty Containers As Freight Becomes Costlier!

57

 

According to an article published in Stuff, freight forwarders say finding containers and space on planes and ships is getting harder and costlier, as the coronavirus pandemic continues to disrupt global networks.

What’s the scenario?

  • One agent said a client air-freighting in a consignment of health products had to pay four times the normal rate, as capacity shrank with airlines cutting flights.
  • Another is struggling to get building materials on a ship from the United States, as shipping companies shuffle routes and sailings to adjust to changing trade volumes.
Passenger flights like this Southern China one, have a big role in carrying airfreight.
SUPPLIED
Passenger flights like this Southern China one, have a big role in carrying airfreight.
  • While major exporters like the Kiwifruit industry and dairy co-operative Fonterra have large locked-in shipping arrangements, other are having to wait for space as perishable exports take priority.

 

Hard To Get Containers

Bob McIntyre whose Auckland firm Lloyds Shipping, specialises in “project cargo” such as machinery and building materials, said empty 20-foot containers were hard to get.

One client needs building material from the United States, for installation in April or May.

Ports of Auckland has experienced a 15 per cent fall in container volumes
DAVID WHITE/STUFF
Ports of Auckland has experienced a 15 per cent fall in container volumes

“The factory said it can make it, but we’ve tried through three different ports in the United States and each has a shipping problem,” he said.

McIntyre said at this end, shipping lines are skipping some scheduled port calls if loadings don’t warrant a stop, meaning some goods having to wait, or perhaps be dropped of elsewhere.

Trevor Duxfield, a 30 year veteran in the freight industry, said air freight space was one problem.

The container terminal at Lyttelton's port
CHRIS HUTCHING/STUFF
The container terminal at Lyttelton’s port

In sea freight, because the global flow of containers was out-of-kilter, shipping lines were charging a $US100 – 200 container “imbalance” fee in many cases.

Why this disruption?

Duxfield said the flow had been disrupted firstly as exports dried up out of China and it became hard there to get empty containers taken to clients.

McIntyre said the problem was now most acute in the United States, where coronavirus took hold as China was beginning to return to production.

The industry umbrella body, the Customs Brokers and Freight Forwarders Federation of New Zealand (CBAFF), said air freight could get more difficult.

“Capacity out of New Zealand is already reduced and that situation will become acute when Air NZ cuts to international and Tasman capacity come into force at the end of the month,” said CBAFF chief executive Rosemarie Dawson, in a statement.

“Currently only Singapore Airlines and Qantas operate dedicated air freight services into New Zealand,” she said.

An Unprecedented Problem

“The Government could offer incentives to encourage them to increase services in the short term, such as waiving landing fees. However, we would (still) be competing against huge international demand.”

McIntyre said the picture could change as freight reflected an economic climate three to four months earlier.

He said the current problems were “unprecedented” in his 25 years in the industry – normally you placed an order for a container and shipment, and that was that.

Now he said freight that might previously have been flown, is looking for space on ships.

“The reality for the duration of this crisis, is that many importers and exporters will need to factor in extra time to enable their products, where feasible, to be transported by sea,” said CBAFF’s Dawson.

Did you subscribe to our daily newsletter?

It’s Free! Click here to Subscribe!

Source: Stuff

LEAVE A REPLY

This site uses Akismet to reduce spam. Learn how your comment data is processed.